Which of the Following Statement Accurately Describes Activity-Based Costing (ABC)

question 29

Multiple Choice

Which of the following statement accurately describes activity-based costing (ABC) ?

• A)ABC considers the entire plant to be one cost pool.
• B)ABC uses a separate cost pool for each department.
• C)ABC uses a cost pool for each activity center.
• D)ABC uses a cost pool for each industry.

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Definitions:

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Trial Balance

A financial report that lists all the balances in each ledger account at a point in time, used to ensure debits equal credits.

Adjusting Entries

Journal entries made in accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Accounting System

A set of processes and tools used by entities to track financial transactions, maintain accurate records, and prepare financial statements.